Rite Aid Faced Previous Overtime Lawsuit

Washington, DCAssistant store managers say they are not being properly paid Rite Aid overtime for work they do over 40 hours a week. And this is not the first time Rite Aid pharmacy stores have faced allegations that they did not properly pay employees for overtime hours. In 2001, Rite Aid faced claims and wound up settling the lawsuit.

According to a June 5, 2001 article in the Los Angeles Times, Rite Aid Corp. paid $25 million to settle claims by store managers, assistant managers and managers-in-training in California who were unfairly denied overtime pay. Approximately 3,000 people were affected by that settlement, which saw them paid a set amount for each week worked from October 1994. As part of the settlement, Rite Aid also agreed to start paying assistant managers overtime, reclassifying them to nonexempt.

However, Rite Aid did not admit any wrongdoing in agreeing to the settlement. Furthermore, that settlement only affected managers, assistant managers and managers-in-training who worked in California. It did not affect workers in the rest of the US.

To be exempt from overtime pay from Rite Aid, as set out by the Fair Labor Standards Act (FLSA), an assistant manager must not only be categorized as an executive (meaning a manager) or administrator but must also carry out managerial duties regularly in the job. This means having the authority to manage, direct and supervise other employees. The assistant manager cannot simply be carrying out the more mundane, regular work that hourly employees are responsible for.

Employers, however, sometimes misclassify their employees as exempt from overtime, simply because the employees have a managerial title, regardless of what the actual day-to-day duties entail. This puts assistant managers in the position of working more hours while not receiving extra pay.

To determine whether or not an employee is exempt from overtime pay, the employer should ask, "What does this employee spend most of his or her time doing?" If the answer is that more than 50 percent of the time is spent in managing, directing and supervising, then the employee may be exempt from overtime pay. If the answer is that more than 50 percent of the time is spent stocking, cleaning and running a cash register, then the employee may have been misclassified as exempt from overtime pay.

Even with salaried employees, it is possible to come up with an hourly wage that is then used to calculate overtime pay. All the employer has to do is take the salary and determine how much that averages out over a regular, 40-hour workweek. Any hours above 40 that are worked are then paid out on an overtime basis, meaning one and one half times the hourly pay. Any employee who is not exempt from overtime pay must be paid this amount for hours that are worked above 40 in a week.